Under the Hood of High-Performing Organizations

Under the Hood of High-Performing Organizations

Most people don’t immediately think of trust and spark when they think about great companies. They think about products (GE), or services (Fidelity). They think about brands (Apple). They think about iconic CEOs and strong growth. But most people haven’t had the opportunity to peer under the hoods of dozens of organizations to see what makes them run smoothly. Or to recognize what’s common to them all.

Our firm has had the honor and privilege to get under the hood and work with many great (and a few not-so-great) companies and organizations. In our role as consultants and coaches to CEOs and organizations around the globe, we’re able to see up close the day-to-day behaviors of people in charge of running and building companies. We’ve been given the opportunity to try different strategies. And we see what works.

So what have we observed?

First, the best-performing companies and organizations invest in building cultures where talented people come to work each day not dreading what they do but truly believing in the company and its products and services and eager to add value. These are cultures where people are inculcated with the spirit of stewardship, of running it like they own it. Where people know that they can disagree, hash it out, and come together as one to focus on getting something done.

Second, we’ve observed communication is the glue that builds great companies. Communication is the real currency—not money— because communication builds trust. As Lou Gerstner, the former CEO of IBM, once said: “It’s about communication. It’s about honesty. It’s about treating people in the organization as deserving to know the facts. You don’t try to give them half the story. You don’t try to hide the story. You treat them as true equals, and you communicate and you communicate and communicate.” People need to trust one another if they’re going to work together effectively. They need to regularly engage in tough conversations, identifying issues, chewing on options, figuring out the best approach, and going into battle thinking as one. Without trust, people will quickly resort to their own selfish behaviors, sowing discord and eventually wreaking havoc in the company.

Third, we’ve observed that great companies—particularly as the pace of change accelerates—are fired up to innovate. Innovation happens because people feel free to envision new products, services, and ways of doing things. It happens because people trust that their ideas will be received positively. They can envision a future in which their creativity will yield something better—both for the company and for themselves.

Now, the currency of innovation is different from the currency of trust.

Whereas communication builds trust, empowerment generates spark. People need to feel empowered—that they literally have the power—to experiment and try things. This means creating pockets of local invention, where small teams work together unburdened by bureaucratic oversight. Tightly knit teams are not necessarily the most creative. Loosely structured teams, with a clear goal but without domineering presences, can give people the room to think before they share results with the group.

Envision an engine room with two levers on the floor. Pull one and you generate high levels of trust. People share responsibility, cooperate readily, and accept compromises swiftly. Pull the other and you stoke the fires of innovation. People quickly identify gaps in quality and fill them, and eagerly sponge up new ideas and put them to work building value. Pull both levers together, and you have a leadership culture. What’s important is that you understand the dynamics of these two forces: trust and spark.

You can learn more about the 10 practices that build trust and spark innovation in my book, The Leadership Equation.

Leading Resources, Inc. is a Sacramento Management Consulting firm that develops leaders and leading organizations. Subscribe to our leadership development newsletter to download the PDF – “The 6 Trust-Building Habits of Leaders” to learn more about how to build trust with your team.

Eric Douglas

Eric Douglas is the senior partner and founder of Leading Resources Inc., a consulting firm that focuses on developing high-performing organizations. For more than 20 years, Eric has successfully helped a wide array of government agencies, nonprofit organizations, and corporations achieve breakthroughs in performance. His new book The Leadership Equation helps leaders achieve strategic clarity, manage change effectively, and build a leadership culture.

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